Nýherji hf. - Financial Statement Release

Nýherji hf. 2009 Results

2009 Highlights

•  Income of the Nýherji Group totalled ISK 14,332 million (m) for the year, a
   YoY decrease of 4%. 

•  Domestic sales of goods returned a profit, while software activities,
   technical services and consultancy reported losses. 

•  Subsidiaries in Denmark reported Q4 losses.

•  EBITDA for the year was negative by ISK 62m, although domestic performance
   improved during the latter part of the year. Final loss for the year was ISK
   686m. 

•  Nýherji faces stiff and growing competition from resurrected companies now
   owned by banks.
•  Goodwill has been written down by ISK 322m following impairment tests of
   subsidiaries.
•  Extensive cost-cutting measures have been undertaken, including reductions in
   the number of employees in Iceland by almost 100 during the year. 

•  Work continues with the company's banks on restructuring its debt, in tandem
   with issuing new share capital. A motion will be raised at the company's AGM
   to authorise a share capital increase of up to ISK 120m nominal value. 



Thordur Sverrisson, CEO:


“Nýherji's operating environment in 2009 was very difficult, resulting in a
loss on the year. The Icelandic market situation has been characterised by a
sharp contraction in demand, due to lower investment by businesses in new
technology and software solutions. This has hit the IT market hard, and debts
amounting to tens of billions of ISK of some of the company's main competitors
have been written off when the companies were resurrected by state-run banks.
Such actions distort competition and the performance of other companies in the
IT sector. For Nýherji, these economic setbacks have meant the loss of over a
hundred employees since the banks' collapse. Further cost-cutting measures had
to be taken in January this year, to meet the abnormal situation on the
domestic market. 

Despite the substantial uncertainty which persists in the economy, there are
positive signs for acceptable performance in 2010, as prospects are good for
group companies to conclude contracts for various major projects in Iceland and
abroad. To reinforce the company's financial basis, work is currently underway
in collaboration with our banks to conclude financial restructuring together
with contracts for long-term financing, in accordance with the general
corporate action plans offered to businesses, and to increase Nýherji's share
capital. This process is expected to conclude in Q2 2010.”


Further information
For further information contact:
Thordur Sverrisson, Nýherji's CEO, tel. +354 893 3630.

Attachments:

press release 29 1 2010.pdf